Ahead of the Curve

The lending environment is undergoing a worrying change. Funds that European direct lenders have raised but not yet deployed are at an all-time high and banks in most Western-European jurisdictions have renewed lending following years of reticence after the global financial crisis, leading to increased competition amongst lenders in the small and medium enterprise (SME) market.

Mercer separates Dutch pension certifying team

NETHERLANDS - Mercer Human Resource Consulting is to set up a separate section for its staff who certify pension funds to enhance the independence of the team.

Dutch daily Het Financieele Dagblad said that from the end of 2006 certifying staff won’t be allowed to advise the same funds they certify. Two years later, certifying actuaries from Mercer will stop doing any advisory work for other pension funds or their sponsors as well.

The consultancy is responding to a debate initiated by the Dutch central bank DNB about the undesirable combination of both roles. The national Association of Actuaries is set to discuss introducing a code of conduct about the separation of advisory and certifying tasks.

The association’s president, PME head Roland van den Brink, was not available for comment.

Mercer’s new certifying unit - headed by Willem Meijer - will be staffed by five of Mercer’s 60 actuaries. Meijer says a similar separation of tasks is not yet on the map for Mercer’s actuaries who are working for insurers. “The discussions about the issue have made more progress at the pension funds than at the insurers,” he added.

According to the report, Meijer admits the new internal separation at Mercer’s could lead to a further split between certifying and advisory work. “The market is not stationary. There might be more radical changes in the future.”

Meanwhile, the Dutch national planning agency CPB is questioning the future of the state pension AOW. It argues that state income support should only be aimed at the ones who really need it. “At the moment the money largely ends up with people who are prosperous enough.”

‘The AOW was originally meant for people who couldn’t cope without state support. If we had to start from scratch we might argue there are better ways of reaching this target,” said a CPB spokesman.

The CPB opinion doesn’t seem to be making it far. Prime Minister Jan Peter Balkenende, Economic Affairs minister Laurens Jan Brinkhorst and the coalition parties CDA and D66 have responded negatively so far.

A different way of financing the AOW – based on a larger contribution from higher incomes – has had a more positive response. The parliament will be debating this issue on April 18.